Ad Hoc Committee Chooses K Street Developer

A city staff report released Thursday afternoon says the ad hoc committee led by Sacramento Mayor Kevin Johnson is backing the developers of the Citizen Hotel to redevelop the 700 and 800 blocks of K Street Mall with a huge public market as the centerpiece.

According the Sacramento Press, the committee, made up of four City Council members - Steve Cohn, Rob Fong, Ray Tretheway and Johnson recommending that the Sacramento Alliance Team led by Rubicon Partners, St. Anton Partners and Preferred Capital Advisors be given the project to revamp city-owned property on those blocks, according to a city staff report.

The City Council is set to vote on the matter this Tuesday.

Last month, a special committee set up by the city recommended two other teams to handle the redevelopment. The Downtown Sacramento Partnership endorsed those selections. Since then, intense lobbying and social media network tools have been used by teams vying for the work.
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This is great news and I hope the City Council also votes in favor of the Alliance team. Please let them know if you haven’t already by clicking here and sending them some words of support, does Sacramento want to settle for reasonable or go for what is achievable?

Rubicon’s Financial Strategy for AuthentiCity

Below's a funding outline for the proposed AuthentiCity and Boqueria California Plan.

By summarizing Rubicon’s project into two financial columns (equity & public funding) the city staff oversimplified Rubicon’s funding strategy. This led the city staff unfortunately to inaccurately represent what Rubicon’s ‘Financial Ask’ of the City is. Rubicon is not asking for $100 M in City funding. In fact, Rubicon’s 700 Block-Only proposal uses half the City Funding that the city staff’s committee recommendation uses to achieve the Same Size project in the Same Time frame.

Rubicon knows the City has but $80M remaining for redevelopment on K Street: $40M of land value (the purchase price of the 700/800 land), $20M of available funds, and $20M of MOPA Funds (ear-marked for David Taylor). Rubicon’s approach is to conservatively leverage this $60M City Investment to create as many jobs, residential units, unique trips, sales tax and real estate tax dollars as possible.

This is not so different than when someone has $20,000 and wants to buy a house. She can buy a smaller house that will cost her $20,000 or the house that is a better fit for $80,000. In order to buy the larger house she leverages (adds additional resources) to the $20,000 to accumulate the $80,000 necessary to buy the larger house. In other words she leverages her available funds to get more.

Rubicon proposes safely leveraging the City’s resources so the City gets more without putting the City at financial risk by using methods the City itself is exploring on other projects and in other parts of town.

If one looks closer at Rubicon’s financing there are basically three categories of funding: Existing Public Funds, New Project Funds, and the Reinvestment of Project Generated Funds.

-The Existing Public Funds consist of the City’s available funds (described above).

-The New Project Funds consists of Rubicon’s Equity and Debt (Rubicon is investing more equity than the staff committee’s recommended project) and not City but Private, State, Federal and Parking funds. The Boqueria California is a perfect example of this. By partnering the City’s land with the State’s Food and Agriculture Industry its possible to create a Civic Amenity that draws potential visitors from through out the region, bringing tax dollars into the downtown without cannibalizing from other parts of Sacramento such as Midtown or the R St Corridor. Another way of saying this is Rubicon is leveraging the Land to attract an investment from the $40Billion/yr Food & Agriculture Industry and create something that otherwise could not be possible.

-Reinvestment of Project Generated Funds consists of funds created by the project that would not exist without the project. These are reinvested into the project.

Because its difficult to summarize Rubicon’s entire proposal into a few paragraphs, let’s compare Rubicon’s 700 Block-Only proposal side by side with the staff committee’s recommendation on all three blocks.

With Rubicon’s proposal Sacramento gets the Same Size project, in the Same Time frame, at Half The Cost and still reserves the opportunity to do something special on the 800 Blocks and still has the $20M of MOPA funds for future reinvestment. (click here for detailed comparison and background data)

SACRAMENTO GETS MORE w/ LESS IN RUBICON’S PROPOSAL.

Please email the City Council in support of this proposal.

Boqueria Open Forum Scheduled

Please join hosts Michael Tuohy, Executive Chef of Grange, and Dan Best of Certified Farmers’ Markets in an open forum to learn more about and the Boqueria California plans for the JKL corridor.

The event is open to the public and will be held on Monday June 28, 2010 from 5:30 – 8:30 pm The Citizen Hotel 7th floor Terrace, 926 J Street in Sacramento.

Great Cities Have Great Places. Help make Boqueria California Sacramento’s Great Place.

http://boqueriaca.com/

http://boqueriaca.com/?page_id=88

The AuthentiCity and Boqueria California Plan

D&S and Taylor Recommended for K Street

The Sacramento Business Journal’s reporting that a city-appointed selection committee has recommended both D&S Development and David S. Taylor Interests Inc., to develop vacant parcels on the 700 and 800 blocks of the pedestrian-oriented street. The final decision of who wins will be made by the Sacramento City Council, which is expected to address the matter in July. The other teams have proposed larger projects on the two blocks.

From what I have learned in looking over the committee’s own numbers, if they were to choose D&S and Taylor for the site, their proposals would require the largest city subsidies to deliver the smallest number residential units. It also looks to me as if David Taylor’s getting favoritism again. Yeah, he's got a proven track record, but so do the Rubicon Partners, developer of The Citizen hotel. The numbers don’t lie Council members, Rubicon can offer more bang for the buck and I suggest you take a second look at everything they can bring to K Street.

Rubicon’s “The AuthentiCity” Proposal

With this proposal, Rubicon Partners went all the way with a bold plan that includes both high density housing and civic amenities center. Their plan is to develop both the 700 & 800 blocks of K Street in four phases. The first and second phase are on the 700 block called Merchants Square and includes 400 residential units, 2000 seat entertainment venue, 125,000 sf. of ground floor retail, grocery store, and an activated alley. Phase one would begin immediately if this proposal were chosen.

Phase three would include a California World and Agricultural Center focusing on agriculturally oriented office tenants in a 250,000 sf. office tower. This block would also include a year-round Marketplace called “The Boqueria” where culinary products and education would be on display. Phase four would include a 150 condominium and 375 hotel rooms in a single tower.

The Rubicon Partners proposal is about three times as big as any of the other proposals and has lots of clever components that make it stand out above the others. Having the project phased in of over many years is also a smart move by the developer, this leaves the developer some wiggle room in case the economy doe’s not rebound like some are predicting. My biggest question about this proposal is, can Sacramento support something this large? After watching many other condo/hotel/office projects fail to get off the ground during our last economic boom when financing was much easier to come by, how will this fair any better? Above all, can Sacramento support something of this size? I know Sacramento deserve a world class project like this, but is it something enough people will want to buy into? In the last 2 ½ years The L Street lofts have only sold about 30 of its 92 units and it’s in a vary desirable mid-town location. In comparison, who does the developer think will want to buy 150 high end luxury condos on K Street? Who exactly do they see filling up another 250,000 sf of office tower? What stores will open up to fill 125,000 sf of retail across the street from the dying Downtown Plaza?

I could go on and on but I think you understand where I’m going with this. Unless there are guarantees made that this whole proposal would be build, (and we all know that can’t happen) I just don’t see how the Sacramento market can support this. What if only phases one and two get built but the hole in the ground at 8th & K gets abandon because expectations far exceed what the market can support? I would love to see this happen, but unless their proposal comes with lots people to buy condos, rent office space and retailers on a waiting list to be part of the project, it looks to be to far-fetched for me.

K Street Projects Revealed

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Rubicon’s “The AuthentiCity” Proposal
Both details and rendering have emerged on several proposals put forth to develop both the 700 and 800 blocks of K Street with Sacramento’s Rubicon Partners showing the most ambitious proposal of them all. The Rubicon’s proposal includes building 400 mixed-income residential units and 150 luxury condos, 2,000-seat entertainment setting, grocery store, a 35,000-square-foot farmers’ market, 375-unit hotel and 125,000 square feet of retail spread over two blocks. The developer named this proposal “The AuthentiCity”. This has got to be boldest of the four proposals with a team that has experience doing projects including The Citizen Hotel as well as both 2110 L Street and 1801 L Street which are high-density mixed-use.

700-800 K Street, LLC
David S. Taylor Inc. has proposed a mixed retail-office development for the 700 block of K Street for about 50,000 square feet of retail and 57,000 square feet of office with the storefront façades retained. Taylor’s proposing 54 low- to moderate-income residential units by joining new construction to the existing Bel-Vue apartment building, and 66 market-rate units in a new four-level building with a rooftop courtyard garden. The team, which includes CIM Group, Domus Development and Zeiden Properties, is proposing a total of about 23,000 square feet of retail on the 800 block as well. This projects probably more doable than the Rubicon’s proposal judging by the rending but it’s a safe bet that having David Taylor take on this troubled area means it will get done. Their experience includes Sheraton Grand and 800 J Lofts here in Sacramento.

Mixed Use Development – 700 and 800 Blocks of K and L Streets
Bridge Housing Corp. of San Francisco along with Saca Development and Bagatelos Development, LLC has proposed building 360 “green” housing units, 33,000 sq. ft. of street facing retail, 48,000 sq. ft. of office space, and 34,000 sq. ft. of terraced open space and courtyards on all three development opportunity sites. Bridge Housing has lots of experience but none to speak of in Sacramento.

Promenade on K Street
Sacramento’s D&S Development competing for just one of the parcels and has a concept of 136 housing units in a four-story building known as “Promenade on K Street”. The proposal recommends removing the rear portion of the long narrow retail space to create 37,480 sq. ft. of more desirable retail space. The space created along the alley would become a four-story residential building over podium parking to provide for 136 new affordable housing units. The development team has received Letters of Intent from several retail and entertainment tenants. D&S Development experience includes Old Sac iLofts, Globe Mills, and the Historic Maydestone Apartments set to begin construction in Summer 2010. D&S Development has also lined up financing with Umpqua Bank and Wells Fargo Bank.

The teams will present their projects to a five-member panel Thursday the 25th which could lead to a recommendation to the City Council on a preferred choice by May. The winner could be awarded millions of dollars in redevelopment funds to bring its project to fruition.

More info about the proposals here